October 7, 2022 — Washington
American Jewish Committee has welcomed new regulations by the U.S. Department of Commerce that clamp down on companies that comply with a boycott of Israel by the Arab League.
The updated rules were detailed by Matthew Axelrod, Assistant Commerce Secretary for Export Enforcement, during a meeting Thursday at the American Jewish Committee office in Washington. Axelrod also oversees the Office of Antiboycott Compliance, which has administrative enforcement authority over U.S. antiboycott laws that prohibit American citizens or companies from supporting unsanctioned foreign boycotts against countries friendly to the United States.
"Despite warming relations some Arab nations have with Israel, the Arab League needlessly persists in this boycott, which has done nothing to hinder Israel from becoming an economic powerhouse in the Middle East,” said AJC CEO Ted Deutch. “We applaud the Commerce Department’s efforts to sanction American firms that bow to the demands of, or seek to curry favor with boycotting nations. They must be held accountable for activities that help spread anti-Zionist sentiment.”
The Arab League boycott has three components: a prohibition on direct trade between member states and Israel; a boycott of companies that do business with Israel; and blacklisting companies that trade with firms that do business in Israel.
To some extent, the practical effects of the boycott have been muted with four Arab League members—the United Arab Emirates, Morocco, Sudan and Bahrain—having established diplomatic and economic ties with Israel under the 2-year-old Abraham Accords. Egypt and Jordan have signed treaties with Israel terminating their participation in the boycott.
"Holdouts, like Assad’s Syria, have categorically rejected 'normalization' with Israel. And in May, Iraq passed a law that even criminalizes normalization of relations with Israel," Axelrod said. "This recent doubling down on anti-Israeli sentiment by countries like Syria and Iraq comes at a time of shocking growth in antisemitism – what AJC notes as the world’s oldest hatred – more broadly, both here in the United States and around the globe.”
In his remarks, Axelrod said the Commerce Department would increase penalties in an effort to deter violations. Companies and individuals will now be required to admit wrongdoing before attempting to settle boycott charges. Previously, companies did not have to admit or deny they engaged in the boycott before reaching a settlement. Also, U.S. companies will be subject to fines because of boycott actions taken by their foreign subsidiaries.
Congress has prohibited U.S. companies from cooperating with the boycott since 1977. However, every year the Commerce Department has continued to identify American companies that violate the law.